High immigration too large a cost to offset ageing

A significant study released today by Dr Katharine Betts and published on the Monash University Centre for Population and Urban Research website shows that, while high immigration can reduce the median age of the population by a few years, it comes at great cost.

The cost is significant population growth that lowers national productivity by taking resources away from productive investment and capital deepening. It also leads to many more older people than would be the case were the population to stabilise.

According to Sustainable Population Australia (SPA), there has been undue preoccupation by the Treasurer, Joe Hockey in the lead-up to the Budget about the problems of ageing.

SPA National President, Ms Jenny Goldie, says the Betts’ study shows that high immigration makes us a few years younger: ‘a median age of 43 instead of 47’ but ‘it is expensive in terms of numbers of extra people, with all their added pressure on infrastructure, cities, services and resources’.

“As the study says, if policy makers genuinely want to minimise demographic ageing at the least cost, the most effective way of doing this is to support the two child family and minimise net migration which, in the year ending 30 September 2013, was 241,000.”

The study cites the Productivity Commission which has pointed out that the infrastructure spending needed in the next 50 years to manage population growth will be five times that which was needed over the last 50 years.

“The study also points out that there is no association between population growth and growth in per capita GDP, not surprising, since studies of 32 OECD countries show no positive association between population growth and growth in labour productivity.”

Ms Goldie also noted that Phil Lowe of the Reserve Bank had said in 2011 that rapid population growth from high immigration since 2000 had placed increasing pressure on pre-existing infrastructure and housing, reducing productivity and living standards.